Enter your peak demand (kW) and demand rate to see this charge's contribution to your bill, common on commercial and some residential accounts.
Demand charges bill the single highest 15-30 minute usage spike in the month, separate from total energy consumed — flattening that one peak, not overall usage, is what reduces this charge.
Unlike a standard per-kWh energy charge, a demand charge is based entirely on your single highest usage spike during the billing period — running several large loads simultaneously for even a few minutes can set an expensive peak that applies to the whole month. Battery storage that discharges during that peak (peak shaving) is the most common way to reduce this charge; see the peak shaving calculator for a fuller breakdown.
Most standard residential rate plans don't include demand charges, but they're common for commercial and industrial accounts, and increasingly appear on some residential time-of-use or EV-specific rate plans.
A battery can discharge during the short window when a facility's usage would otherwise spike, capping the peak draw pulled from the grid and lowering the billed demand for that period.